This is the second of a three-part series  about a commonly used method of environmental protection for wetlands and streams called “compensatory mitigation.”
The federal Clean Water Act requires developers of residential, commercial, transportation and energy projects to offset “unavoidable impacts” to streams or wetlands. They usually accomplish this by buying “credits” from the state Division of Mitigation Services  (DMS) or private mitigation banks, of which there are roughly 20 in North Carolina.
DMS and the private banks generate and sell the credits by restoring, preserving or creating environmental projects in advance within the same watershed. They use the fees in part to fund additional mitigation projects for future projects.
Today’s installation focuses on how mitigation projects could suffer because of the Trump administration’s rollbacks of environmental regulations that protect our lakes, rivers, streams, wetlands and drinking water.
This series was funded by a grant from the the Triangle Community Foundation .
This a place where the Atlantic Ocean begins: A yawning storm pipe draped by kudzu about a half-mile south of the Durham Bulls Athletic Park. Little more than a murky ditch, the shallow stream winds south, beneath the American Tobacco Trail bridge, behind a strip mall, and past two gas stations, to Forest Hills Park.
To illustrate the connections between Durham’s lowly downtown ditch to the coast, if you floated a paper boat from the headwaters in Forest Hills, its 150-mile journey would run south through Third Fork Creek, which in turn merges with New Hope Creek, which flows into Jordan Lake, a drinking water supply for hundreds of thousands of people. The boat would skim over the dam and into the Cape Fear River, which travels through southeastern North Carolina and spills into the Atlantic south of Wilmington.
In the early aughts, somewhere in this watershed someone built a road or a housing development, and disrupted a stream — an “unavoidable impact,” in mitigation parlance. Because the impacted stream was regulated under the federal Waters of the United States rule, the developers were required to offset the damage elsewhere, in a spot that needed some “TLC.” In 2003, the state’s Division of Mitigation Services chose to restore a flood plain, buffers and 3,000 feet of stream on an ailing 8.9-acre tract in Forest Hills Park.
The Waters of the United States rule, in part, made this restoration possible. Enacted by Congress in 1973, WOTUS, as it’s known for short, regulates “navigable waters” — rivers, lakes, streams, wetlands and seas, as well as any waters that directly connect to them.
This plays out in real life, for example, when an industrial plant wants to discharge pollutants into a river. Or a state transportation department wants to fill in a wetland to build a road. In each case, the entity must get a federal and state permit detailing the extent of the harm it can exact.
Now the Trump administration, catering to the real estate interests, agribusiness, mining companies, pipeline builders, and industrial dischargers, has rolled back WOTUS  and other key provisions in the Clean Water Act. Fewer protections for streams and wetlands mean some of these sensitive waterways would be polluted, filled in, dredged, or paved over with impunity.
And in terms of mitigation, if a stream or wetland has no protections, then damage to it from development doesn’t have to be offset elsewhere.
“Although we have slowed stream and wetland loss and degradation, we have not stopped or reversed it,” Geoff Gisler, attorney with the Southern Environmental Law Center , said. “Under existing law, more wetlands and streams are degraded or destroyed than are restored or replaced through mitigation.”
That situation is likely to get worse  under the Trump administration.
In North Carolina, wetlands cover 5.7 million acres of land, about 17 percent of the state. Most of the wetlands are in eastern North Carolina, where they provide crucial flood protection and wildlife habitat. In addition, 51,000 miles of streams — equivalent to two trips around the equator — are at risk from the WOTUS rollback. Some parts of the state, Gisler said, could lose protections for 50 percent of their streams.
Even with Clean Water Act protections, North Carolina’s waters are still polluted: from coal ash pits, chemicals, hog waste, raw sewage — 85 million gallons of which spilled into the state’s waterways last year. Repealing the federal protections would likely despoil the water quality we do have.
“We could see dramatic increases in number of streams plowed over, developed, paved,” if the repeal withstands legal challenges, Gisler said. “There’s going to be a visible and noticeable difference in the quality of our waters.”
Trump’s muddy definition of ‘water’
Forest Hills Park, couched between a tony area and several working-class neighborhoods, is an oasis, with statuesque firs and magnolias and expanses of mown green fields. The American Beautyberries are now ripe, their fruits studding the underbrush of nascent pines and horseweed as if they were amethysts.
Nonetheless, this is an urban park, and subject to urban insults. While a 50-foot buffer along the creek helps blunt the waterway from runoff, the park is located in a flood plain, and during the heaviest rains, water rushes from downtown and engorges the banks, carrying with it plastic bottles and bags and Styrofoam trays, as well as invisible pollutants like fertilizers, oil and fuel.
Since Third Fork Creek, including the portion in Forest Hills, ultimately drains to the drinking water supply, it needs protections under the Clean Water Act — protections that could be unraveled under the Trump administration. By narrowing the definition of the phrase “Waters of the United States,” it would be “the biggest rollback in clean water protections in the 47 years since the Clean Water Act became law,” Gisler testified last week at a hearing of the House Subcommittee on Water Resources and the Environment.
The confusion over WOTUS, according to the U.S. Army Corps of Engineers, which administers it, is whether “intermittent streams” and “ephemeral streams”— tributaries that only temporarily connect to navigable waters, such as during heavy rain — deserve federal protection.
Years of legal wrangling and Supreme Court decisions only muddied the issue. For example, in 2006, the U.S. Supreme Court split 4-1-4 on the definition of a water of the United States. “They didn’t look at the science of WOTUS but in the dictionary for the definition,” Gisler said. “Four justices said if it’s not a stream, lake or river, it’s not protected. Four justices said leave it to the Corps and the EPA to decide. One, Justice Kennedy, wrote in his opinion that a ‘significant nexus’ of water bodies that affects downstream water quality is the standard.”
So in 2015, the Obama administration amended the WOTUS rule. In doing so, the EPA validated the science showing the underground hydrological connections between ephemeral or intermittent streams and their more robust counterparts. Obama’s WOTUS rule acknowledged the ecological value of isolated wetlands in providing flood control and wildlife habitat. It did not, contrary to the rule’s opponents, apply to most farm ditches, farm ponds, and storm water retention areas in housing developments.
Because of legal challenges, the Obama rule was not implemented nationwide, with about half the country using it and the other half reverting to a weaker one enacted during the administration of President George W. Bush. (North Carolina, which in 2016, joined a multi-state lawsuit against the Obama WOTUS, has been operating under the Bush-era rule.)
In 2017, Trump’s EPA began the repeal process , which, barring successful legal challenges, will unfold in two steps. First, the EPA recently finalized the repeal of the Obama-era WOTUS rule, and replaced it with the lite version from the Bush era. In addition to eliminating federal protections over millions of acres of wetlands and thousands of miles of streams nationwide, to hamstring the states, the EPA is also proposing to restrict states’ abilities to shield their own waters from pollution and harm.
The administration’s next step is to enact a new rule, one that could transport environmental law back to an era before the Clean Water Act was enacted — when the Cuyahoga River caught fire, when towns and cities treated their urban waterways like open sewers. “That’s where they’re headed,” Gisler said.
Opponents rejoice WOTUS repeal
It’s not a coincidence that EPA Administrator Andrew Wheeler chose to announce the repeal last week at the National Association of Manufacturers headquarters . NAM, along with the National Mining Association  and the American Farm Bureau Federation, have all lobbied for WOTUS to be weakened.
“Today’s Step 1 action fulfills a key promise of President Trump and sets the stage for Step 2 — a new WOTUS definition that will provide greater regulatory certainty for farmers, landowners, homebuilders and developers nationwide,” Wheeler said.
NAM president and CEO Jay Timmons falsely claimed the Obama-era rule “sought to regulate dry land. … Manufacturers are committed to environmental stewardship, so we now look forward to a new, more effective rule to protect clean water.”
American Farm Bureau Federation President Zippy Duvall  released a statement saying, “Farmers and ranchers share the goal of ensuring clean water, but the 2015 Waters of the United States rule was unreasonable and unworkable. It made conservation more difficult and created huge liabilities for farmers. ”
An actual reading of the Obama rule refutes the claim that it would have regulated puddles and farm ditches — and dry land. Only those few ditches that also functioned as streams were covered. “Farm ponds and ongoing farming is exempt,” Gisler said. “Irrigation ditches aren’t covered.”
The most forceful pushback came from heavy industry. “They put the farmers out front because they’re sympathetic,” Gisler said. “This isn’t about farming.”
John Preyer, president of Restoration Systems, a mitigation banker based in Raleigh, refuted the Farm Bureau’s claim that the WOTUS rollback is helping farmers.
“No one in the ecosystem services market benefits from mitigation more directly than farmers,” Preyer said. “In most areas of the country, the very best sites for wetland and stream mitigation projects are almost always on traditional family farms.”
Restoration Systems has done more than 100 separate real estate transactions buying land from farmers for mitigation projects, Preyer said. “This allows the farmers to get often three to four times the agriculture value for their land. So when the Farm Bureau claims that this WOTUS rollback is helping farmers they are not shooting straight. It instead helps the large industries that impact resources through big footprint plants, mines, pipelines, and they are using farmers as a decoy. That’s just plain wrong.”
Fallout for North Carolina could be severe
The rollbacks could have severe ramifications for North Carolina, said Rick Savage, president of the Carolina Wetlands Association. He spoke at a Water Resources Institute conference earlier this year, warning attendees of the fallout from the WOTUS repeal. The Carolina bays and Pocosins in eastern North Carolina qualified for protection under the Obama rule, had North Carolina chosen to adopt it; now those potential protections have evaporated.
Also at risk in the coastal regions are mosaic wetlands, a patchwork of wetlands each less than an acre and unconnected by surface water. Yet even alone, they are inherently valuable in filtering pollution, absorbing floodwaters and providing wildlife habitat.
As for streams, it’s unclear if the intermittent variety will be protected. During moderate to severe droughts, parts of Third Fork Creek have dried up. Because of the lack of rain in Durham, one of the tributaries to the Forest Hills headwaters has gone dry, leaving nothing but a rocky stream bed.
The geology of the Triassic Basin,  which includes Durham, western Wake and eastern Chatham counties, includes large swaths of sandstone and clay. These soil types prevent water from flowing easily, and one of the results, said Norton Webster, regional director of Environmental Banc and Exchange, is that streams in the area “appear and disappear.”
The Mountain Valley Southgate project , a natural gas pipeline proposed to route through Rockingham and Alamance counties — the headwaters of the Jordan Lake watershed — could be among the first tests of Clean Water Act rollbacks. The Federal Energy Regulatory Commission (FERC) recently issued a Draft Environmental Impact Statement for the project showing it would cross more than 200 streams or wetlands — and the damage to some might not have to be mitigated.
DEQ has already written letters to FERC questioning the necessity of MVP Southgate and judging from written correspondence, seems wary of the project. DEQ does have the power, though, to grant — or not — a water certification for the project. But among the Clean Water Act rollbacks is a proposal that would give the EPA the authority to override a state decision. Even if DEQ disagrees, North Carolina could be stuck with the pipeline.
In addition to the environmental damage that could result from fewer mitigation projects, there is an economic argument to maintain these protections: Nationwide, the mitigation banking business is a $2 billion to $4 billion industry. At financial risk is the work — and the bottom line — of the mitigation banks, engineering firms, surveyors, construction workers, maintenance crews, title companies and attorneys.
Initially, private mitigation banks won’t lose business, said Michael Hare, director of government affairs and communications with Resource Environmental Solutions. “As long as the mitigation banking industry focuses on where areas are growing, we’ll have a very healthy market.” Most states weren’t operating under the Obama rule.
But if the Trump administration implements its second phase of the rollback, “that’s where it gets murky,” Hare said.
After the federal government removes its protections, “we’ll need to see what the states do.” Some could pass tighter restrictions. That is unlikely in North Carolina because state law prohibits agencies such as the NC Department of Environmental Quality (DEQ) from enacting rules that are stricter than the federal governments’.
Hare expects Trump’s new rule to be immediately challenged in the courts. “There will be a nationwide stay and years of confusion,” Hare said. “It hinges on politics. But I don’t think what Trump put out will last in a durable way.”
John Preyer, president of Restoration Systems in Raleigh, acknowledges that the industry needs continuity, but he is less optimistic about the fallout from the Trump rule. “It could potentially have a huge effect,” Preyer said. “Today’s standard of success is the culmination of 30 years, from a nascent industry to full maturity. It’s never worked better than it does today.”
The sun is setting at Forest Hills, and the frogs — chirpers — are settling in for the night. The waters of Third Fork Creek form a small waterfall over some large, flat rocks. The journey to the Atlantic is long, and because of the pollution — from industry, livestock, septic tanks, and other human interventions — at times, perilous. This is only the first mile. There are 150 more to go.